Housing Bubble
Gone but not forgotten.
Joined: Jul 2001
Posts: 6,521
Likes: 2
No bubble? With mortgage rates low, many have bought beyond what they can afford and are without emergency backup funds. Many others have borrowed on their equity. Default rates are rising in many areas. Many are deluded into thinking that values will always go up. I recall being told that there was no tech bubble, that value was what some one would pay today and no more. Some markets are absolutely crazy, here's an example (CA) from Warren Buffett.
Buffett: "I recently sold a house in Laguna for $3.5 million. It was on about 2,000 square feet of land, maybe a twentieth of an acre, and the house might cost about $500,000 if you wanted to replace it. So the land sold for something like $60 million an acre." Now that is crazy.
Dono
Buffett: "I recently sold a house in Laguna for $3.5 million. It was on about 2,000 square feet of land, maybe a twentieth of an acre, and the house might cost about $500,000 if you wanted to replace it. So the land sold for something like $60 million an acre." Now that is crazy.
Dono
Hotshot
Joined: May 2004
Posts: 12,170
Likes: 5
From: The hills of No. Calif.
I don't think there's any danger of the bubble bursting, it's just going to stop growing at some point. We won't see prices drop, they'll just level off. My county is probably the fastest growing county in the state (darn it) and even thought the median home price has more than doubled in the last 5 years, it's still below the state average. There are still good deals to be had here, just not really great deals. Unfortunately the average wage has not increased along with the housing market, so the average wage earner here can't afford to buy a home, unless it's a falling-down trailer on a steep lot and that'll still be overpriced! -TD
Postmaster
Joined: Feb 2003
Posts: 2,848
Likes: 1
From: Kentucky
The real estate bubble never really "bursts", it just deflates . The REB deflates when inflation makes consumers default on their too high of payments, such as when a recession hits, and their jobs are evaporated in the pursuing domino effect.
Posting Guru
Joined: Feb 2003
Posts: 1,226
Likes: 0
I think alot of the building thats going on right now is baby boomer money, and low interest rates. I think what greywolf was saying about location property was you don't need to live up on snob hill, save your self some money and live in a more moderate place. We could all live in a more ritzy place but who wants the payments
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